theme 4 section 17 globalisation

Question 1

what is globalisation
and the impact of globalisation

Answer 1

is the connection between different countries and business taking part in trade

globalisation has made communication and transport much cheaper and more efficient for a business

all businesses to make a strategic decision on where to purchase
materials from and where production must take place inorder to reduce cost

Question 2

indicators of economic growth and emerging countries

Answer 2

gdp = the number of goods are service produced in a country annually

HDI
Literacy rate

countries that are developing and has potential to grow. the market is not yet saturated and has a lot of young people with a good disposable income

Question 3

what are imports and exports

Answer 3

imports are when goods are bought into the country from overseas. gives consumers wider option
may harm domestic producers due to competitors lower prices
money leaves the economy

exports when goods leaves the country to overseas market
money flowing into economy
may allow specialisation

Question 4

what is competitive advantage and also examples

Answer 4

competitive advbantage is when a business has an edge over its competitors example having higher market share

specialisation allows the business to produces workers who are high skilled in what they do. this increases the rate at which they do the work and the quality in consistent

producing in large quantities allows a business to benefit from economies of scale this decreases unit cost the business can pass this to customers by charging lower prices increasing demand if product is price elastic. increasing sales

or the business can keep intial price and increase profit margin

Question 5

specialisation advantages and disadvantages

Answer 5

adv :
may attract clients
reduces unit costs and wider pool of staff to choose from
may outsource work without training staff for your business with high quality

dis:
demand decreases the market for this service may decline
the business wouldn’t have other source of revenue to make up for this loss

Question 6

what is FDI

Answer 6

foreign direct index
when a business invest into another business in another country

Question 7

horizontal FDI and vertical FDI

Answer 7

horizontal :
when a business invest in another business in the same production stage as the original business

vertical :
when a business invest in another business in a different part in the supply chain

Question 8

what is trade liberalisation

Answer 8

the reduction of removal of barriers to trade

Question 9

what is protectionism and example

Answer 9

potectionsim is when a government protects its domestic business

this could be through tariff and quotas ( tariff is tax paid when goods are bought into the country )

quotas ( a restriction on the volume of goods imported into the country over a time period )

domestic subsidies are sums of money provided by the government to domestic firm in a certain industry